A sharp fall in the price of liquid crystal display (LCD) panels caused LG.Philips LCD to fall deep into the red during the second quarter, the company said Tuesday.

LG.Philips LCD, one of the world’s largest manufacturers of LCD panels, lost 322 billion won (US$340 million as of June 30, the last day of the period being reported) in the second quarter, compared to a net profit of 41 billion won in the same period a year earlier. Sales were up 0.3 percent to 2.3 trillion won.

In response, the company will stop its investment in existing production lines and cut back its planned spending in areas like new machinery and factories this year, from 4.2 trillion won to 3 trillion won.

Ron Wirahadiraksa, LG.Philips’ president and chief financial officer, said the company is disappointed with its performance but confident that its results will improve during the remainder of the year.

Intense competition lies behind the big loss. Vendors have been increasing production to satisfy demand for flat-screen televisions and LCD computer monitors and have been cutting prices in a bid to secure market share.

LG.Philips LCD saw the average selling price of panels drop 18 percent between the first and second quarters of this year, it said.

The company expects LCD panel prices to stabilize in the second half of the year, it said.